Late last month, Hong Kong-based satellite communications company SpeedCast bought Australian satellite company Pactel International and, in a little-publicised deal, Digicel PNG agreed a deal to purchase the country’s home-grown satellite company, Remington Communications, from the larger Remington group.

The takeovers reduce the number of operators in the PNG satellite market (Telikom PNG last year signed a deal with the Luxembourg-based satellite operator SES to provide coverage for its fixed line business between remote and rugged parts of the country).

Pactel supplies connectivity across all areas of the Asia-Pacific region, including Australia, Indonesia, PNG and Pacific Islands. SpeedCast and Pactel executives view their deal, yet to receive regulatory approval, as ‘expansionary’.

‘Pactel has established itself as the leading satellite communications service provider in the Pacific region, with a diverse group of customers including telecoms, large oil and gas operators, governments and multinational mining companies,’ Pierre-Jean Beylier, Chief Executive Officer of SpeedCast told Business Advantage PNG:

SpeedCast’s Pierre-Jean Beylier

‘We have satellite coverage over the Pacific Islands and service a number of existing customers but the amount of business we have is limited. We wanted to add that region to our portfolio, so in a way it’s geographic expansion. A second reason is that we intend to build out a powerful player in the Australian market.’

Australia is a key market for SpeedCast, says Beylier, as it will allow the company to target Australia’s huge mining and gas industries.

He says it will also put SpeedCast in the top five global players in the booming VSAT services industry. Global industry revenues grew by five per cent in 2011 to US$177.3 billion, according to the Washington-based Satellite Industry Association.

Meanwhile, the purchase of Remington is Digicel’s second major acquisition, after it bought ICT service provider DataNets and in doing so, took a controlling interest of DataNets’ subsidiary, NEC PNG Limited. Both acquisitions can be viewed as indicative of Digicel’s transition from a mobile phone company to a full-service telco, a move facilitated by the deregulation of PNG’s ICT market.

Satellite: still viable in PNG

Pactel’s Andrew Taylor

Although many businesspeople in PNG and Australia believe the mining ‘boom’ is over, Pactel’s Chief Executive Officer Andrew Taylor (who is staying with the business) told Business Advantage PNG he expects satellite services to the local mining industry to expand, continuing the post-deregulation trend of the past few years.

‘There are many projects in the pipeline still. PNG still has its challenges both logistically and in regards to communications. Its geography being very rugged makes a perfect market for satellite communications,’ says Taylor.

‘Satellite communication has been in very large demand. So we’ve seen very good growth in the last couple of years since deregulation in PNG.

‘While there has been some terrestrial infrastructure built, particularly by companies like Digicel, there will always be a need for satellite in PNG.’

Taylor also believes the demand for satellite usage is such there may be room for additional satellite companies in PNG. Furthermore, PNG’s National Transmission Network—under construction and due for completion in 2016—will only add to the satellite business.

‘PNG is in desperate need of some good terrestrial infrastructure,’ he says,’ and in a lot of areas terrestrial infrastructure facilitates more satellite services. We see the NTN as a good thing for PNG and a good thing for our businesses.’